House Democrats on Friday passed the Build Back Better Act, President Joe Biden’s signature spending plan that includes approximately $ 1.75 trillion in investments to expand childcare programs, cut healthcare costs, among other things Fighting climate change and increasing affordable housing.

This version of the Build Back Better plan has the potential to directly impact the finances of millions of households with a range of new and expanded tax credits, plus a new supplement for the richest Americans with personal incomes over $ 10 million House.

The bill is now being passed to the Senate, where it is met with opposition from Republicans and moderate Democrats like Senator Joe Manchin of West Virginia, who want to cap spending and avoid increasing federal debt. This is likely to be a point of contention after the Congressional Budget Office (CBO) found that passing this bill would increase the deficit by $ 367 billion between 2022 and 2031.

Read on to learn more about the financial implications of the Build Back Better spending plan, and visit Credible to compare interest rates on a variety of financial products, from personal loans to student loans.

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What’s in the Build Back Better Act?

The Build Back Better agenda includes a series of historic investments that “will put the United States on track to meet its climate change goals, create millions of well-paid jobs, enable more Americans to enter and stay in the workforce, and.” to strengthen our economy “. from the bottom up and from the center out, “according to the White House.

Here are some key investments that are included on the bill that can affect your finances:

For more information on each policy, see the following sections.

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Extended tax credit for children

Build Back Better extends the American Rescue Plan Act’s Extended Child Tax Credit (CTC) through 2022. This brings the current limit of $ 2,000 per child to $ 3,000 per child ages 6-17 and 3,600 US dollars increased per child under 5 years of age.

It also makes the full refund permanent, meaning that low-income families who typically don’t make enough money to file a tax return are still eligible for the full credit. According to the Center on Budget and Policy Priorities (CBPP), this will permanently reduce child poverty by up to 40%.

In addition to expanding the CTC, Build Back Better limits childcare costs for toddlers to 7% of family income. The bill also creates a framework for free universal preschool for more than 6 million American children ages 3 and 4.

Families who cannot afford childcare and other necessary expenses can take out a fixed-rate loan to cover the costs. You can compare personal loan interest rates for free on Credible.

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Increased Pell grants and HBCU funding

Pell Grants are awarded to students who are in extreme financial distress. Biden’s spending plan will increase the maximum Pell Grant amount by $ 550 for more than 5 million students enrolled in public and private nonprofit colleges.

Additionally, Build Back Better includes tuition grants for students at Historically Black Colleges and Universities (HBCUs) with family incomes less than $ 125,000, as well as increased funding to improve research and development programs at those schools.

However, there is one higher education provision that has been removed from Biden’s economic package: the toll-free community college. Learn more about how to pay for college, including private student loans, on Credible.

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Tax breaks for electric vehicles

Under the bill, the White House has named its Build Back Better plan “the greatest effort to fight climate change in American history.” Some of this clean energy investment comes in the form of tax credits for electric vehicles.

The current law of reconciliation could cut the cost of American-made electric vehicles by as much as $ 12,500. This also includes investments in the infrastructure of electric vehicles, which could make charging stations more accessible to motorists.

One thing to keep in mind, however, is that electric vehicles can still be more expensive to buy and more expensive to insure than conventional gas vehicles. To ensure you’re getting the lowest possible car insurance rate for your situation, compare multiple insurers’ offers on Credible.

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Affordable housing

Build Back Better would fund the construction, refurbishment, and improvement of more than 1 million affordable housing units to increase housing supply and reduce housing costs for renters and homeowners.

It will also expand home vouchers to hundreds of thousands of additional families and invest in down payment assistance programs for first generation home buyers. Overall, the framework includes a $ 150 billion investment in affordable housing, according to the National Association of Realtors (NAR).

Potential homebuyers and current homeowners should also consider getting a home loan now or refinancing their current mortgage before interest rates inevitably rise. Visit Credible to compare mortgage offers from multiple lenders at the same time.

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Medicaid and ACA extensions

While data shows that medical costs are the leading cause of bankruptcies in America, some aspects of Build Back Better are targeted at health care, including expanded Medicaid programs and expanded tax credits on insurance premiums.

The White House estimates that the current framework will lower premiums for more than 9 million Americans by extending the premium tax credit available to eligible individuals who have purchased health insurance through the Affordable Care Act (ACA).

According to CBPP, Build Back Better would also improve Medicaid by reducing coverage gaps for the Children’s Health Insurance Program (CHIP), adding 12-month postpartum insurance coverage for pregnant women, and the quality of community-based housing services for the elderly and people with disabilities.

If you’re struggling to keep up with rising medical debt, consider taking out a debt consolidation loan to pay back overdue hospital bills at a low, fixed rate. You can learn more about debt consolidation and see if this option is right for you by reaching out to a knowledgeable loan officer at Credible.

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